State Bank of Drummond v. Nuesse

• Decision Date: 07 March 1961
• Citation: 108 N.W.2d 283,13 Wis.2d 74
• Parties: STATE BANK OF DRUMMOND, a Wis. banking corporation, Appellant, v. William E. NUESSE, Commissioner of Banks, Respondent.
• Court: Wisconsin Supreme Court

Page 283

108 N.W.2d 283

13 Wis.2d 74

STATE BANK OF DRUMMOND, a Wis. banking corporation, Appellant, v. William E. NUESSE, Commissioner of Banks, Respondent.

Supreme Court of Wisconsin.

March 7, 1961.

Stewart G. Honeck, Harry F. Franke, Milwaukee, John Walsh, Madison, of counsel, for appellant.

John W. Reynolds, Atty. Gen., Roy G. Tulane, Asst. Atty. Gen., for respondent.

DIETERICH, Justice.

The appellant-petitioner attacks the validity of sec. 221.04(1)(f), Stats., as amended by ch. 101, Laws of 1947, which prohibits any bank from establishing a branch office or bank station after a certain date, but which allows banks that had branch offices or stations already established prior to May 17, 1947, to continue same, is void because in its passage there was a failure to obtain a two-thirds vote of all the members elected to each house of the legislature as required by sec. 4, art. XI of the Wisconsin Constitution. ¹

The undisputed facts are that William Banach was elected on April 22, 1947, to fill a vacancy in the assembly, thereby bringing the membership to its legally authorized strength of 100. ² On April 24, 1947, the assembly passed Bill 77-S which created ch. 101, Laws of 1947. Sixty-six assemblymen voted for the bill, 12 opposed it and 21 were absent or abstained from voting. Banach did not take his oath of office as a legislator until April 29, 1947, which was five days after the final assembly vote.

The appellant-petitioner contends that Banach was a 'member elected' to the assembly and he should have been counted within the meaning of the phrase 'the vote of two-thirds of all the members elected.'

Sec. 28, art. IV of the Wisconsin Constitution ³ requires members of the legislature before entering upon the duties of their office to take and subscribe on an oath or affirmation to support the constitution of the United States and the constitution of the state of Wisconsin, and further that they will faithfully discharge the duties as a member of the legislature to the best of their ability.

The popular or reasonable import of words furnishes the general rule for the interpretation of public laws. The plain, obvious and rational meaning of a statute is always to be preferred to any curious, narrow or hidden sense. The words, 'before they enter upon the duties of their respective offices, take * * * an oath' are direct, unambiguous expressions, and mandatory and leave no room for construction.

Banach could not enter upon the duties of his office and one of these duties consisted of his exercising his right to vote. This right to vote came into being on April 29, 1947, when he took his oath of office. The bill was passed on April 24, 1947. It therefore follows that Banach was not a member of the legislature and had no vote. He was an assemblyman-elect until the day he took his oath of office.

The appellant-petitioner next challenges the constitutionality of sec. 221.04(1)(f), Stats., for the following reasons:

1. The law violates sec. 1, art. I of the Wisconsin Constitution, and sec. 1 of the Fourteenth amendment of the United States Constitution in that it denys petitioner equal protection of the laws as well as due process.

2. The statute is arbitrary and discriminatory.

3. The classification adopted is not germane to the purpose of the law.

It is settled by unanimous legal authorities and conceded by both sides that 'unless otherwise provided by statute a bank has no right to establish branch banks.' 9 C.J.S. Banks and Banking § 55, p. 87. The same authority continues: 'As a state may prohibit branch banks entirely, it may make any regulation applicable to them, short of prohibition, which are reasonable and uniform, * * * The state is the only one who may question the legality of maintenance of a branch bank.'

By an amendment to the constitution in 1902, certain provisions were repealed and the present sec. 4, art. XI, which authorizes the regulation of the banking business by a general banking law became a part of our state constitution. The controversy thus rests upon fundamental principles of the power of the legislature for drawing a distinction between an old business and a new one and the limitations upon that power. The question in the present case then, is not one of authority, but of its appropriate exercise. It is a legislative decision, a policy decision, and must be respected by the court as long as it is founded on a reasonable basis. State ex rel. Risch v. Board of Trustees, 1904, 121 Wis. 44, 98 N.W. 954; Servonitz v. State, 1907, 133 Wis. 231, 113 N.W. 277; Maercker v. City of Milwaukee, 1912, 151 Wis. 324, 139 N.W. 199, L.R.A.1915F, 1196; Waldum v. Lake Superior Terminal & Transfer R. Co., 1919, 169 Wis. 137, 170 N.W. 729, and Wait v. Pierce, 1926, 191 Wis. 202, 209 N.W. 475, 210 N.W. 822, 48 A.L.R. 276.

If any one proposition could command the universal assent of the courts, we might expect it would be this,--that banks are quasi-public institutions and that laws and regulations affecting banks are framed in the public interest. Hawkins Realty Co. v. Hawkins State Bank, 1931, 205 Wis. 406, 236 N.W. 657.

It is clear that in determining claims of unconstitutional discrimination and the denial of alleged rights, a distinction must be drawn between a lawful business in which one has the right to engage and other types of business which may be carried on only as a result of legislative grace. The right to engage in banking in the state of Wisconsin is purely a matter of such legislative grace.

In Kiley v. Chicago, M. & St. P. R. Co., 1910, 142 Wis. 154, 159, 125 N.W. 464, 466, it is stated:

'* * * It is the class, considered broadly as a class, which must possess the distinguishing differences of situation calling for different legislation, not every individual in the class.'

In Price v. State, 1919, 168 Wis. 603, 171 N.W. 77, 81, this court held:

'* * * that as to matters of classification the Legislature has a very broad discretion, and that its judgment with reference thereto will be respected and enforced by the courts, unless the classification is so arbitrary that there is no conceivable basis in reason therefor.'

In the instant case the facts disclose that the subject of branch banks and branch stations is of such great public interest that it has a direct bearing upon the economic life of the state. The classification of permitting branch banks and stations that existed prior to the enactment of sec. 221.04(1)(f), Stats., to continue is not an unlawful discrimination or an illegal classification so as to constitute a denial of the equal protection of the law under the Fourteenth amendment of the United States Constitution or the constitution of the state of Wisconsin. Randles v. Washington State Liquor Control Board, 1949, 33 Wash.2d 688, 206 P.2d 1209, 9 A.L.R.2d 531, and Price v. State, supra.

In its decision the trial court stated:

'In the instant case it is conceded and the records indicate that there are some 555 banks in the state of Wisconsin. Of this number 86 banks have a total of 136 branches or stations. These 86 banks with existing branches or stations have total deposits of $1,638,932,000.00 or 37.3 per cent of the total of all deposits of all the banks in the state. Consequently when the legislature adopted ch. 101, Laws of 1947, it must be presumed that they gave thought to the economic dislocation, to say nothing of the prejudice to existing property rights, which would have occurred had there been a complete ban imposed against branch banking.'

We agree with the trial court's conclusion and accept as adequate the reasons advanced to support it.

There can be no doubt that the legislature determined that a halt must be called before the tangle became so intricate that it could no longer be...